Huobi Global, a major cryptocurrency exchange, has reported a $30 million profit for the first quarter of 2023. This comes after months of reported losses in profit. A few months ago, the Huobi exchange started implementing a series of cost-cutting measures that seem to have worked well. According to an April 10 tweet by Justin Sun, an advisor of Huobi Global, the exchange generated $150 million in revenue during Q1 2023. Put that against $120 million in expenditures and you are left with $30 million in profit.
Among other things, Sun stated that the several measures taken proved successful. Of course, he also mentioned this quarter’s measures to reduce costs and increase efficiency. Sun also projected that the second quarter of 2023 would see revenues of $187 million and expenses of only $76 million. This would leave the crypto exchange with a net income of $110 million.
Huobi Global was once among the largest cryptocurrency exchanges by trading volume. Back in 2020, the Huobi exchange had a market share of 19%. However, after cutting ties with mainland Chinese users in 2021, the platform’s market share plummeted. In Q4 2022, it is estimated that the Huobi exchange has a market share of only 2.2%. For your information, Justin Sun recently received the title “adviser” at the Huobi exchange. Back in November 2022, Sun’s entity, About Capital, reportedly acquired a 100% stake in the exchange. Thus, Sun now acts as an “adviser” at Huobi Global.
Huobi Exchange Lay-Offs Contributed To Current Profits
Earlier this year, Huobi Global laid off around 20% of its total workforce. Additionally, they also reduced employee benefits significantly, all in an attempt to keep the exchange alive during this vicious bear market. To make it even harder for the exchange, its native token experienced a major crash on March 10, losing 90% of its value in just a few hours.
While the token has recovered since the crash, some users have yet to be compensated. One victim of the HT crash is Twitter user @Lantian666 who reportedly lost $4 million. The individual claims that, even though Sun promised to compensate all users, they have not received adequate compensation yet.
The significant profit turnaround for Huobi Global is a good thing. It demonstrates the potential for recovery even after facing many challenges in the crypto industry. The exchange’s cost-cutting measures and structural changes appear to have played a crucial role in restoring profitability. Additionally, the exchange projects better results for the next quarter.